Data Miners

For underwriters to accurately price a risk they must gather all the relevant data on a person or a company—and that can be a complex task that requires more than a Google search. In 2009, Dan Adamson founded Outside Intelligence, a search-based application company that focuses specifically on risk. “We realized that many carriers are not able to systematically take advantage of outside data, or even properly take advantage of their internal data, because of business challenges like mergers as well as technical challenges,” says Adamson, who previously worked at Microsoft helping to develop its Bing search engine.

Adamson and his team at Outside Intelligence have created a contextual profiling search technology that scours internal and external data sources and returns the most relevant information rather than a long list of results. “If your context is commercial D&O insurance, for example, then you’re obviously interested in the senior management team of a company. You’re probably interested in if they were travelling to high-risk areas of the world, or what their history is, what other things they’ve done in the past. These all influence your pricing decision,” says Adamson. “It’s very hard to chain all of that together as an underwriter and get a consistent picture. What we do is we go out and mine all of that content and really bring back this consistent, best-fit picture.”

The software Outside Intelligence created to gather this data is InsuranceIQ, a product that carriers can customize to suit their risk models.

“Our approach is to bring in new data that carriers haven’t traditionally been exposed to that will help them make their pricing decisions.”

Reasons to Watch

“The whole industry is going through a lot of change right now,” says Adamson. The insurance industry used to be able to rely on generating a profit through investment yields, he says, but since 2008, that is no longer the case. In order to be profitable now, companies must price risk more accurately. “Every insurance carrier is trying to do a better job pricing and there’s only so many ways you can do that while remaining competitive,” he says. “Our approach is really to bring in new data that [carriers] haven’t traditionally been exposed to that will help them make their pricing decisions.”

Recent Triumphs

In the summer of 2012, Outside Intelligence partnered with CGI, a global IT firm, to develop a commercial fleet product. The product will combine CGI’s vehicle and driver information with Outside Intelligence’s search technology. “Traditionally [commercial fleet underwriters] have a very manual, paper-intensive process,” says Adamson. By developing this new product, he says, “We can help automate piecing together that risk view for them.” CGI is also developing in-house experts who can help carriers take advantage of Outside Intelligence’s search technology and implement it properly.

Challenges

“We’re gaining great traction, but the insurance industry is not always the fastest moving,” says Adamson. There are those, he says, who remain skeptical of the value of the technology that Outside Intelligence provides. “We faced that challenge early on. We now have a bunch of proof points and most people are taking notice of those to be able to say that it does make a difference, that you can price more effectively using our data and our risk models.”

New Initiatives

The company is now working on developing a product for brokers to use. “On the broker side, there is equally a need to find these good risks, to highlight the right things to the carriers, to really win more business faster,” notes Adamson. Outside Intelligence is developing a broker product and even has its first customer lined up:HKMBHUB International.

Outside Intelligence has also been garnering positive feedback from the US market and the company hopes to expand in the near future. “Hopefully what we’re developing here in Canada will be the norm for what’s being done worldwide.”